Retail sales by value jumped 5.4% last month, driven by sharp growth in online revenues, latest government figures have revealed.
Backing up a string of positive Christmas trading updates, the ONS also said sales by volume across the industry were up 4.3% year-on-year in December.
Growth was driven by online, with sales soaring 21.3% compared to December 2015. Online sales accounted for 15% of all retail sales last month.
Many retailers – including M&S, Tesco and Debenhams – reported good top-line growth over the peak trading period.
All retail sectors saw a rise in sales by value last month, but clothing had the slowest growth, up 0.7%. Volumes among clothing retailers slid 0.1% year-on-year.
The ONS also noted that average prices, excluding fuel, rose 0.1% last month – the first increase since June 2014.
“Prices may have been slightly impacted by changing Christmas strategies, but this could indicate the start of more sustained price rises,” said Barclays’ head of retail and wholesale Ian Gilmartin.
Meanwhile, sales by value and volume fell 1.3% and 1.9% respectively last month, compared to November, the ONS said.
Gilmartin said: “This partly reflects the industry’s evolving approach to Black Friday and the period after it, as Christmas spending is now spread over a longer period.
“It doesn’t really matter to a retailer whether they generate revenue in November or December. What they care about is their overall performance, and this data shows that the net result for the final quarter was much more impressive this year.”
However, retailers such as Next and John Lewis have warned of the pressures facing the sector in 2017, which is expected to impact pricing and drive up costs.